Warning

Report: CMS Tells RACs to Stop Work, Effective May 31

The Centers for Medicare & Medicaid Services reportedly instructed the Recovery Auditors (RACs) to stop work on all new auditing activity, effective May 31, but a representative of the agency denied that any such move was made.

In a written memo to stockholders sent Friday, Emily Evans with Obsidian Research Group, explained that the stop order will be in effect until the RAC procurement process is complete, which by her estimate would be late this summer.

"RACs cannot issue new records requests or perform any new audit activity with the exception of continuing to process existing RAC claims that were initiated prior to May 31, 2013," Evans wrote. "The stop work order is in effect until the re-procurement process is complete ... and then there is the possibility of a protest by a company that wasn't awarded a contract."

Yet when reached for comment, CMS representative Tony A. Salters said his agency's Office of Financial Management indicated that no such order exists.

"We are in the middle of procurements, so we do not expect for there to be any disruption in the Recovery Auditor review," Salters wrote in an email.

In her memo, Evans speculated that if there is a protest, CMS could be expected to alter the timing of the stop order – if it exists at all.

"If such a protest were to happen, (the) Government Accountability Office (GAO) would have 100 days to complete the review and adjudicate the protest," Evans wrote. "There is the possibility that CMS could alter the timing of the stop work order; however, as it currently stands it takes effect at the end of May and continues (to remain) in place until the RAC re-procurement is completed."

"The timing of the award of the RAC re-procurement is being held up because HMSY is protesting a provision of the re-procurement," Evans said. "Management indicated (that) the provision of the re-procurement they are protesting is the actual solicitation process, (which) was defective due to the unequal treatment of bidders with regard to the handling of appeals."

Evans quoted an unnamed HMSY source who reportedly indicated that "the incumbent contractor would bear a greater financial burden in handling the review of appeals than would a new contractor."

Later Friday, Evans noted that the GAO this week accepted HMSY's protest. The 100-day deadline for a decision, therefore, would fall on or about July 15. Additionally, Evans noted, CMS indicated that it will delay announcing the awarding of the contract until the protest has been resolved.